Per-capita income gaps across US states and Canadian provinces
Abstract
We propose that per-capita income gaps across US states and Canadian provinces can be explained by university education. Our ordinary least-squares regressions show university education having a robust positive and significant effect on per-capita incomes, when controlling for, e.g. taxes, unionization, government spending, and the sectoral composition of the economy. To control for endogeneity we instrument education today with different historical variables: population density in 1900, railway density in 1900, the sex ratio (men per woman) in 1900, and the fraction slaves in 1850. Our results support a causal link from education to incomes, and the hypothesis that these historical variables are valid instruments. We also find that the Canada dummy is mostly insignificant, and always positive.Download Info
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Bibliographic Info
Article provided by Elsevier in its journal Journal of Macroeconomics.
Volume (Year): 30 (2008)
Issue (Month): 3 (September)
Pages: 1173-1187
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Handle: RePEc:eee:jmacro:v:30:y:2008:i:3:p:1173-1187
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Web page: http://www.elsevier.com/locate/inca/622617
For corrections or technical questions regarding this item, or to correct its listing, contact: (Jeroen Loos).
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